Financial Management Quiz

Solvency refers to:

• The ability to meet long-term financial obligations

• The ability to generate profit

• The ability to manage daily expenses

• The ability to increase market share

Which of the following would be considered a current liability?

• Accounts payable

• Long-term debt

• Owner's equity

• Fixed assets

The liability of an owner in a corporation is limited to:

• The amount of their investment

• The total corporate debt

• The company's total assets

• The company's annual revenue

If you need to borrow to finance annual farm operating expenses, the most likely lender would be:

• Commercial bank

• Insurance company

• Venture capitalist

• Government grant

Which one of the following is a valid use of a cash flow budget for a farm or ranch business?

• Planning for future financial needs

• Determining market trends

• Calculating tax liabilities

• Estimating crop yields

A written agreement by which an owner of property transfers the title to someone to manage and safeguard for the benefit of another is called:

• Trust

• Lease

• Mortgage

• Contract

A cash flow plan:

• Projects future cash inflows and outflows

• Determines tax liabilities

• Calculates depreciation

• Estimates market trends

Which of the following is the primary purpose of a current ratio?

• Measure liquidity

• Assess profitability

• Evaluate market trends

• Determine tax liabilities

Intermediate term loans would typically be made for each of the following except:

• Buying livestock

• Purchasing seed

• Building a barn

• Acquiring machinery

Sources of information useful for developing a cash flow projection include:

• Past financial records

• Market trends

• Weather forecasts

• Competitor analysis